Friday 22 February 2013

Week 8: Budgeting!

After thinking about what I wanted to blog about this week I realized i've encountered A LOT of people in the past month inquiring about how to make more money.

Something i've come to realize this past year is its not all about how much you bring in, but what you are doing with the income you already have. I'll give you an easy example. When my husband and I were both working we were bringing in about $70,000 a year. After about a year we realized that we weren't paying off our debt at all and it felt like we were always broke and living paycheck to paycheck. How could that be? We took a course at our church about money management and it challenged us to keep track of our spending for a few months (just like how Gail does it on Till Debt Do Us Part!). WOW! Were we shocked to find that we were spending $400-$600 eating out, $100+ at Starbucks and over $1000 a month on groceries. Of course we were feeling broke, because we were!

At that point we were thinking about starting a family which meant that I would be going on maternity leave. We realized we had to rein in our spending or we would have no money to pay for essential baby items. After 3 years of refining our budget I am happy to tell you that our household income is HALF of what we made when we were both working (yes that's $35,000 a year take home) and still comfortably go on 2 vacations a year, have a brand new car, a toddler (who requires copious amounts of stuff (more than a baby)) and another baby on the way and I am now a stay at home mom. We don't sacrifice any of the things we love to do we just altered where we spend our money and how much is allocated to specific items. When you think you have no money sometimes its just about cutting out things you don't need or creating a specific budget and sticking to it.

Here are some of things we budget for every month:

Rent: $975
Food: $400
Tithe: $300
Utilities: $100
Cell Phone: $100
Car Payment: $265
Life Insurance: $50
Gas: $100
Internet: $45
MSP/Medical: $200
Credit Cards: varies

My husband works a half salary/half commission job, so some months we have a little leftover, some months a lot. Notice there are a few things I haven't budgeted for such as Eating Out (restaurants/coffees) and Cable (project free tv), Insurance, Vacations and there is no Savings or RRSP allotment either.

Most of you know the reason I started this blog was because my husband was laid of in 2011, which is why we moved. Due to that we are still fine tuning our budget. Eventually we would like to be able to put money aside each month for savings and start our RRSPs again. Insurance we typically pay out right and just find the cash and we pay for vacations via whatever we get back from our annual Tax Return. Cable, I believe, is a completely unnecessary expense. We use Project Free TV and watch all up to date tv episodes for any show that is currently on TV and we eat out ONLY on Sunday's after church, this way it becomes a treat and not an every other day occurrence.

How to get started:

So all that information is great but how do YOU get started making the same changes.

1. Figure out what your Monthly Income Is:
-This can sound like an easy thing to do, but even for us it can sometimes be difficult. My husband works a salary and commission job so our monthly income is different EVERY month...so we took his average monthly income from last year and that is the number we work from every month.

2. Keep track: 
-I'm going to give you the same advice from Gail and the very advice that got us started. Keep Track...every penny, of what you spend. Do it for a month, 3 months, 6 months and see where all your money is going. Sure there is money you have to spend, like rent/mortgage/utilities, but then there are varying expenses such as groceries/gas/cell phone which can be lowered.

3. Start a Spreadsheet:
 -The easiest way to start is to create an excel spreadsheet. Put your income at the top and list all your expenses with the budgeted amounts underneath. Every time you pay a bill or spend money minus it from your total. When the money is gone its gone. This way is also a great way to never miss a payment as you will be able to visibly see whether or not you have spent the money you budgeted. It is dangerous to just pay bills as they come in and not list them on a piece of paper as you may find at the end of the month you have forgotten a bill and have no money left in the bank to pay it. Gail suggests the following numbers (% of monthly income):

Housing (mortgage/rent/repairs/utilities incl. cellphone) = 35%
Savings = 10%
Transportation (Car Payments/Gas/Insurance) = 15%
Debt = 15%
Groceries = 15%
Other = 10%

4. Make Adjustments:
After you have been keeping track you can start adjusting numbers.

-If you are finding you have lots of money leftover in a specific area, allocate it to an area that has been tight for making payments.
-Maybe you need to start couponing and meal planning. If you have been reading my blog for a while you'll know I saved $2300 last year just by using coupons. Coupons can be for all sorts of things, online purchases, groceries, movie tickets, restaurants...they are out there and they can save you a bundle.
-Perhaps you need to limit where you eat out or how often like we did
-Do you drive a lot, perhaps you and your husband need to share a vehicle. I get the car 3 days a week and my husband takes it the other 4 days.
-Get rid of cable

There are lots of tiny adjustments that can be made to save you money. You can even 'google' Budgeting or How to Budget for some great ideas and tips. 

Total Spent Week 8: $33.85
Total Coupon Used Week 8: $57.74 (SAVED MORE THAN I SPENT!!!)

YTD Grocery Total: $785.24 (average $98.15 per week)
Coupons To Date: $231.34 (average $28.92 per week saved)
% Savings to Date: 28%

Sunday 17 February 2013

Week 6&7: Under $110 per week for groceries!

Very busy and that means I haven't had time to sit down and blog, however I will update my grocery totals:

Total Spent Week 6&7: $133.08
Total Coupon Used Week 6&7: $29.23

YTD Grocery Total: $751.39 (average $107.34 per week)
Coupons To Date: $173.60 ($average $24.80 per week saved)
% Savings to Date: 19%

I've been getting some great deals on handmade things for our place. Next week i'll show you what we got :)

Monday 4 February 2013

Week 5: Frugal February and an Update

 Frugal February

Frugal February is a new concept for me, but in the couponing world A LOT of people talk about it. As smartcanucks.ca puts it "For some people, Frugal February means trying not to buy anything, they stock up before Feb 1st and spend money only on bills and essentials like getting to work etc but that is a little extreme for most people.  The true essence of Frugal February is about shopping only for essentials and not all the extra consumerism that our society has become.
You would buy only groceries, brown bag it rather than buy lunch out, have fun at home rather than go to the movies etc.  Frugal  is about trying as many money saving ideas as you can, such as spend-free days, not eating out, etc., and live as cheaply as possible. Try to eliminate all non-essential spending and only spend money on necessities and put the money you do not spend towards debt or savings – not blow it all on March 1st."

I had a super hard time coming up with a goal since I already do a lot of things to save money. I decided that instead of $400 as my budget for groceries I was going to knock it down to $300 and put an extra $100 towards our credit cards.

On the topic of goals; one of my goals (resolutions) this year was to purchase more handmade goods. I really want to start supporting families who create/make and grow things to earn a living. My goal is to purchase 1 thing a month for a full 12 months that is either local or handmade (Etsy.com)

January's Local/Handmade Purchase

My first purchase of the year I choose to support someone across the globe. Tahel Sadot lives in Israel and has a shop on Etsy.com called 'Mariposa Handmade Handbags' (http://www.etsy.com/people/TahelSadot). She produces the most gorgeous wallets and handbags out of leather and yes they are all made by hand. My wallet broke just before Christmas and I was getting frustrated with buying cheap ones to get me by for a few months, so I decided to look around on etsy.com to see if I could find a handmade one that I liked and would suit my needs. I knew from past purchases that leather lasts a long time, so I definitely wanted a leather one. I found her shop and decided to splurge on one of her wallets ($76) for my birthday. I received it within 14 business days - really fast! The price may seem high, but when you consider where it is made, the quality and that it is one of a kind - totally worth it! Here's some pictures of the wallet I chose:

 

I choose the 'rough' leather look in brown. It holds 16 cards, which I love and has 2 large pockets and a zippered one inside and a change pocket on the back. This wallet has the most card slots and room out of any I have ever purchased and could easily be used as a clutch. I also love how flat it lays, most wallets are big and bulky and this one is very sleek and stylish!

Total Spent Week 5: $112.87
Total Coupon Used Week 5: $47.36

YTD Grocery Total: $618.31
Coupons To Date: $144.37
% Savings to Date: 19%

My challenge this week is for you to find 1 thing to cut down spending on for the month of February. Maybe it's eating out or maybe it's paying an extra $50 towards some debt.